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Now, more than ever, there are an increasing amount of small- to midsize enterprises that are going up for sale. There are many reasons why. But, more importantly, of those that are selling their businesses, how many are losing a great deal of their business's value in the process?

To get our answer and to discuss the key findings behind them, let’s first explore the biggest business broker site on the web today, BizBuySell.com. According to their data, not being able to sell is the single biggest issue business owners face.

BizBuySell stated that 80% of businesses that are listed on their website don’t sell. So, why aren’t they selling and what factors should business owners consider if they are ultimately planning to sell?

Over 50% of pending transactions in the process of transitioning to new buyers fall through. The leading factors behind this issue are due to misrepresentation of information, lack of properly structured systems and false expectations that are set by certain business consultants. Business owners have become increasingly frustrated with the current exit marketplace and are looking for solutions more than ever. In research that was conducted back in 2013 by the Exit Planning Institute on how satisfied business owners were after selling their companies, 75% of the business owners were dissatisfied with the results post-exit.

Looking at the economy, the Small Business Administration estimates that there are 30.2 million small businesses in the United States alone, based on statistics from 2018. This staggering number accounts for 99.9% of all businesses in the U.S. This demonstrates that small businesses are the backbone of the economy.

Based on the current marketplace and the huge discrepancies in the valuation of businesses, owners should be increasingly concerned about how they could retain the maximum value of their businesses.

To make things simple, here are the three strategies I most recommend to retain the maximum value for your business if you plan on exiting in the next 12 to 36 months.

1. Cut The Fat To The Bone

As obvious as it may sound, most businesses are holding on to redundancies that aren’t helping the value. In fact, on one of my recent deals, there were a lot of unexplainable costs that shouldn’t have existed to start with.

Most business owners believe that, since it’s their business, they can add all sorts of business expenses. The problem is that most of these expenses aren’t really contributing to the value of their businesses. Even though the objective may be to reduce taxes and obtain certain deductions, when it comes to selling an “investable” business, the numbers need to be justified.

Reevaluate and audit your current statements. Break down each and every redundancy and formulate a strategy to execute that will help you get rid of the fat. And yes, that even includes letting go of extra personnel, like family members you hired as a favor.

2. Make Your Company Work Without You

Do you know your customers by name and deal with them personally? Houston, we have a problem. Though knowing the names of your customers and dealing with them on a personal level may be the highest standard of customer service, it is not a positive quality to a business investor.

When a business investor looks at a potential deal, one of the most influential factors in decision-making is the evaluation of how dependent the business is on the owner and how much of their involvement will be needed on a day-to-day basis to keep the business running.

Business investors are looking for functional, independent and well-structured companies to buy. A big reason business negotiations fall through the cracks is the amount of involvement from the new owner/investor that will be needed. This scares off a lot of potential buyers and decreases your chances of being able to sell for the price that you want.

3. Exit The Business In All Levels After The Transaction, Not Before

In my experience, most business owners mentally checked out of their businesses from the moment they made the decision to sell. They’re already scouting the vacation spots they want to go to, where they’ll spend the time with their families and the hobbies they’ll pick back up that they couldn’t enjoy during all those years of hard work.

That may all sound fun and exciting, however, you still have to wait until you've successfully completed the transfer of ownership. If you fail to be emotionally and mentally prepared to negotiate, justify and defend the value you want, you’ll end up being frustrated and may not get what you want. This is one of the most important factors to consider when selling your business.

In fact, I would strongly recommend that you be very careful about over-optimistic assumptions by certain business consultants and brokers who promise you the world, only for you to end up chasing them down on the phone every couple of months to see if they’ve found a buyer for you.

The best thing you can do for yourself is to be well-prepared and continue operating your business at maximum efficiency so there is not much wiggle room around the performance. This way, you’ll create a win-win scenario for the potential new buyer.

In conclusion, if you follow the three steps I’ve highlighted for you when it comes to exiting your business, you’ll have a more realistic and defined plan to follow and can end up retaining the maximum value for your business. Of course, there are other factors to consider, but these should be a starting point to guide you to a successful exit.